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The US economy’s strength and continued tight labor markets could warrant further Federal Reserve interest rate increases, Fed Chair Jerome Powell said on Thursday in remarks that appeared to push back against market expectations that the central bank’s rate hikes had reached an end.

“We are attentive to recent data showing the resilience of economic growth and demand for labor. Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said in remarks to the Economic Club of New York.

For inflation to durably return to the Fed’s 2% target, it “is likely to require a period of below-trend growth and some further softening in labor market conditions,” Powell said.

Since the Fed began raising interest rates in March of 2022 the unemployment rate has varied little from the current 3.8%, below the level most Fed officials feel is noninflationary, and overall economic growth has generally remained above the 1.8% annual growth rate Fed officials see as the economy’s underlying potential.

The Fed is “proceeding carefully” in evaluating the need for any further rate increases, Powell said, likely leaving intact current expectations that the Fed will leave its benchmark policy rate steady at the current 5.25% to 5.5% range at the upcoming Oct. 31-Nov. 1 meeting.

There is evidence the labor market is cooling, Powell said, with some important measures approaching levels seen even before the pandemic.

Powell also noted a number of fresh “uncertainties and risks” that need to be accounted for as the Fed tries to balance the threat of allowing inflation to rekindle against the threat of leaning on the economy more than is necessary.

Those include new geopolitical risks to the economy from the “horrifying” attack on Israel by the Palestinian militant Hamas group, Powell said.

“Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain,” Powell said. “Speaking for myself, I found the attack on Israel horrifying, as is the prospect for more loss of innocent lives.”

He also noted recent market-driven increases in bond yields that have helped to “significantly” tighten overall financial conditions.

“Persistent changes in financial conditions can have implications for the path of monetary policy,” Powell said, with higher market-based interest rates, if sustained, doing the same job as Fed rate increases.

But the Fed chair also voiced what has become a lingering theme at the central bank: That despite steady progress on lowering inflation, the battle isn’t over, with further rate increases still a possibility and the duration of tight monetary conditions still to be determined.

“Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said, citing the progress made since inflation peaked last year but also noting that one of the Fed’s main measures of inflation remained at 3.7% through September, nearly twice the central bank’s target.

“We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters,” Powell said. “The path is likely to be bumpy and take some time…My colleagues and I are united in our commitment to bringing inflation down sustainably to 2%.”

The weeks since the Fed’s September meeting have been unusually turbulent, with worries about regional war in the Middle East rising and bond markets driving market interest rates higher, tightening the financial conditions faced by businesses and households somewhat independent of the Fed.

Data since the Fed’s last meeting also has shown US job growth reaccelerating unexpectedly, retail sales defying predictions of a slowdown and varying measures of prices offering inconsistent signals about whether inflation is on track to return to the Fed’s 2% target in a timely manner.

Powell’s appearance comes less than 48 hours before the beginning of the traditional quiet period ahead of the rate-setting Federal Open Market Committee’s meeting on Oct. 31-Nov. 1. While a handful of other Fed officials have appearances later on Thursday and Friday before blackout begins on Saturday, it is Powell’s remarks that will set the tone for policy expectations heading into that meeting.

Should they leave rates unchanged in two weeks as is now widely expected, it would mark the first back-to-back meetings with no rate increase since the Fed kicked off its hiking campaign in March 2022.

A Reuters poll of more than 100 economists published on Wednesday showed more than 80% expect no rate hike at the next meeting, and most also believe the Fed is done with rate hikes even though a majority of policymakers at their September meeting projected one more quarter-point increase was likely to be needed by year end.

Many in the poll offered the caveat that if progress on inflation stalls out or reverses, the Fed would not hesitate to resume raising rates.

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Sources: Nats demote All-Star after all-nighter

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September 21, 2024

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Sources: Nats demote All-Star after all-nighter

  • Jeff Passan, ESPNSep 21, 2024, 01:47 PM ET

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      Author of “The Arm: Inside the Billion-Dollar Mystery of the Most Valuable Commodity in Sports”

The Washington Nationals demoted All-Star shortstop CJ Abrams to the minor leagues after he stayed out all night at a Chicago-area casino, leaving only hours before a Friday day game against the Chicago Cubs, sources told ESPN’s Jesse Rogers.

The 23-year-old Abrams led off for the Nationals and went 0 for 3 with a walk and strikeout in Friday’s game, which started at 1 p.m. CT. He was informed of the demotion Friday night, sources said. He will be sent to West Palm Beach, home of the Nationals’ minor league complex.

Because Abrams has been with Washington for the entirety of the season, the demotion will not affect his service time. Players earn a full year of service with 172 days on the major league roster, and Abrams already has exceeded that threshold.

Abrams could, however, file a grievance through the Major League Baseball Players Association to fight for lost pay if he believes the demotion unjust. He would lose around $30,000 of his $752,000 salary for missing the season’s final week. Abrams will be arbitration-eligible this winter, entering the system for the first of four times as a Super 2.

Acquired as one of the centerpieces of the Juan Soto trade two years ago, Abrams parlayed a breakout first-half into an All-Star selection, hitting .268/.343/.489 with 15 home runs and 15 stolen bases over the Nationals’ first 89 games. He struggled significantly in the second half, slashing .203/.260/.326, and Abrams’ defense has been a weakness throughout the season.

Still, the Nationals did not intend to send him to the minor leagues until they learned of his time spent at the casino, which was first reported Friday by CHGO.

“I just want it to be known it wasn’t performance-based,” Nationals manager Dave Martinez told reporters Saturday. “It’s an internal issue. I’m not going to give specifics.”

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At least 44 people killed in Israel strikes on Lebanon and Gaza in last 24 hours

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September 21, 2024

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At least 44 people killed in Israel strikes on Lebanon and Gaza in last 24 hours

At least 44 people have been killed in Israeli strikes on Lebanon and Gaza in the last 24 hours. 

A strike on the Lebanese capital Beirut killed at least 31 people including three children and seven women, the country’s health minister Firas Abiad said.

Beirut
Beirut

Fifteen of the 68 wounded in the attack remain in hospital.

Ali Harake, the head of the rescue team searching through the rubble, told Sky News his team is still looking for between 17 and 18 missing people – though he fears none have survived.

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It is understood two apartment blocks in a densely populated southern neighbourhood collapsed in the strike – the deadliest attack on Beirut in decades.

Beirut

Top Hezbollah commanders are believed to have been meeting in the basement of one of the buildings.

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Hezbollah has confirmed two of its senior commanders, Ibrahim Aqil and Ahmed Wahbi, died in the strike while an Israeli military spokesperson said that at least 16 Hezbollah militants were killed.

Beirut

Wahbi oversaw the military operations of the Radwan special forces – a commando unit that seeks to infiltrate and carry out attacks in Israel – until early 2024. Aqil was also a top commander for the Iran-backed group.

The Palestinian militant group Hamas has described the killing of Aqil as a “crime” and a “folly”, adding Israel will “pay the price”.

Read more: Israeli airstrike on Beirut causes more shock to a country already rocked to its core

Meanwhile, at least 13 people have been killed in Israeli strikes on Gaza City, according to a local report.

The strikes are believed to have hit several schools sheltering displaced people in the southern part of the city.

Palestinians inspect a school, which was sheltering displaced people, after it was hit by an Israeli strike, amid the Israel-Hamas conflict, in Gaza City, September 21, 2024. REUTERS/Dawoud Abu Alkas
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Inside a school, that was sheltering displaced people, after it was hit by an Israeli strike this morning. Pic: Reuters

A Palestinian man walks on a street after a school, which was sheltering displaced people, was hit by an Israeli strike, amid the Israel-Hamas conflict, in Gaza City, September 21, 2024. REUTERS/Dawoud Abu Alkas
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The street outside the school. Pic: Reuters

The strikes come after Hezbollah launched one of its most intense bombardments of northern Israel in nearly a year of fighting, largely targeting Israeli military sites.

Israel’s Iron Dome missile defence system intercepted most of the Katyusha rockets.

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Hezbollah said its latest wave of rocket attacks was a response to past Israeli strikes on southern Lebanon.

It came days after mass explosions of Hezbollah pagers and walkie-talkies killed at least 37 people, including two children. Some 2,900 others were wounded in the assault which has been widely attributed to Israel.

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World

Fire rips through arms depot deep inside Russia after huge Ukrainian drone attack – as Zelenskyy prepares to meet Trump

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September 21, 2024

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Fire rips through arms depot deep inside Russia after huge Ukrainian drone attack - as Zelenskyy prepares to meet Trump

A fire has ripped through a Russian missile depot in the Tver region deep inside the country after it was targeted in a Ukrainian drone attack, the defence ministry in Moscow has said.

Footage shows a second Ukrainian drone attack on the southwestern Russian region of Krasnodar also triggered a fire and caused a series of explosions.

Russia’s defence ministry has claimed its forces shot down 101 Ukrainian drones over Russian territory and occupied Crimea during the overnight attacks.

The drone strikes were carried out as Ukrainian leader Volodymyr Zelenskky said he is hoping to meet Donald Trump next week when he travels to the US – where he will present US President Joe Biden with a “victory plan” in relation to the war.

An explosion after the drone strike on the arms depot in Krasnodar
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An explosion after the drone strike on the arms depot in Krasnodar

Meanwhile, Ukraine’s foreign minister said Russia appears to be planning strikes on Ukrainian nuclear facilities before the winter.

Posts on local Telegram channels said a Ukrainian drone attack struck an arms depot near the town of Toropets, in Russia’s Tver region – which is about 380 kilometres (240 miles) northwest of Moscow and about 500 kilometres (300 miles) from the Ukrainian border on Saturday.

Russian authorities closed a 100-kilometre (62-mile) stretch of a highway and evacuated passengers from a nearby rail station.

The depot appeared to be just miles from a Russian weapons arsenal storing missiles, bombs and ammunition in Tver that was struck by Ukrainian drones early Wednesday, injuring 13 people and also causing a huge fire.

Flames rise during an explosion, amid the Russia-Ukraine conflict, in Toropets, Tver region, Russia in this screen grab obtained from a social media video released on September 18, 2024. Social Media/via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. NO RESALES. NO ARCHIVES.
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Flames rise after the strike on the Tver region on Wednesday. Pic: Reuters

Meanwhile, at least 1,200 people were evacuated from Russia’s southwestern Krasnodar region after an ammunition depot and missile arsenal were struck in the second drone attack overnight, the local governor has said.

Most of those evacuated were staying with friends and relatives, Veniamin Kondratyev, the governor of Krasnodar region, said on the Telegram messaging app.

There were no immediate reports of casualties in either Tver or Krasnodar.

Ukraine warning of attacks on nuclear sites

It comes as Kyiv is urging the International Atomic Energy Agency (IAEA) and Ukraine’s allies to establish permanent monitoring missions at the country’s nuclear plants as it warns they could be targeted in Russian attacks.

“In particular, it concerns open distribution devices at (nuclear power plants and) transmission substations, critical for the safe operation of nuclear energy,” foreign minister Andriy Sybiha wrote on X.

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Parents die on Hawaii ‘babymoon’
Anthony Joshua’s shot at greatness against Dubois

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A mushroom cloud rises after the drone strike on Toropets in the Tver region. Pic: Reuters
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A mushroom cloud rises after the drone strike on Toropets in the Tver region. Pic: Reuters

Zelenskyy prepares for US trip

Meanwhile, the Ukrainian leader has said he plans to meet Republican presidential candidate Mr Trump on either Thursday or Friday next week.

During the trip, Mr Zelenskyy will present Mr Biden with a so-called victory plan as he hopes to bring about an end to the conflict.

Volodymr Zelenskyy with Donald Trump in 2020. Pic: Reuters
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Volodymr Zelenskyy with Donald Trump in 2020. Pic: Reuters

The Ukrainian president has said the plan will include long-range striking capabilities and other weapons long sought by Kyiv, and will serve as the basis for any future negotiation with Russia.

He is also expected to push Washington to lift restrictions on long-range missile strikes inside Russia.

Mr Zelenskyy will attend sessions of the UN Security Council and General Assembly and also plans to meet vice president Kamala Harris, the Democratic candidate in this year’s US election, in separate meetings on 26 September.

The developments come as three sources have told Reuters that Iran did not include mobile launchers with the close-range ballistic missiles that Washington has accused Tehran of delivering to Russia for use against Ukraine.

The sources – a European diplomat, a European intelligence official and a US official – said it was not clear why Iran did not supply launchers with the Fath-360 missiles, raising questions about when and if the weapons will be operational.

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